Notting Hill Genesis (202014057)

REPORT

COMPLAINT 202014057

Notting Hill Genesis

31 March 2022

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme. The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

1. This complaint is about the landlord’s rent arrears recovery action.

Background and summary of events

Background

2. The resident is an assured tenant living in a two-bedroom property, her tenancy began on 25 December 1989.
3. The tenancy agreement states that the tenant will not be given less than four weeks’ notice in writing of the landlord’s intention to seek a possession order. It adds that it will only seek to obtain a possession order on the grounds of non-payment of rent.
4. The landlord’s website has a section about rent and service charges which states that ’Your rent account must always be £0.00 or more in credit. If it is not, you will have breached your contract.’
5. The landlord has an arrears and collections policy which, amongst other things, states that it will:

1. Have direct contact with residents at all stages of income collection.
2. Make direct contact with residents at all stages of rent collection using a variety of methods including letters, phone, email, texts and home visits.
3. Only serve a NOSP where we have repeatedly attempted contact with the resident.
4. Ensure that it is sensitive to vulnerabilities and mental wellbeing.
5. Act in accordance with the Pre-Action Protocol when dealing with arrears.

6. The landlord has a two-stage complaints policy. It states that at stage one it will acknowledge complaints within two workings days and provide a full written response within 10 working days. If the complaint is not resolved it can be escalated to stage two, where it will provide a written response within 20 working days. If the resident remains unhappy, then the complaint can be referred to this Service.
7. The landlord has a compensation policy allowing it to make payments where it has failed to follow its own procedures, or where it has caused delays by not meeting its own service standards.

Summary of Events

8. On 3 February 2021, the landlord sent the resident a Notice of Seeking Possession (NOSP). At that point, the balance of the rent account was £5,032.49 in arrears.
9. The resident contacted the landlord on 6 February 2021, she explained that her Universal Credit has been stopped and her student loan funding had finished.
10. On 9 February 2021, the resident emailed the landlord explaining that she had been in financial hardship since September 2020. The resident expressed that the NOSP was the first contact she had received about the arrears. She says that she tried phoning the named contact on the letter but the phone was off.
11. On that same day, the housing officer responded by email, advising she was currently unable to make phone calls due to system issues with her phone. The housing officer said that the resident had been advised that a payment amounting to a minimum of half of the arrears needed to be paid to put a pause on any legal action.
12. The resident responded on 9 February 2021, saying that she needed to discuss her situation over the phone as she was currently waiting for a benefit payment to come through. The resident referenced a letter from the landlord saying that it told her she would be able to speak with the named contact on the letter directly.
13. On 16 February 2021, the landlord called the resident, and the following was discussed:

1. The resident was in arrears of £5,298.87 and the NOSP was served as she had stopping making any payments.
2. The resident said her student loan had finished and her Universal Credit payments had been cancelled.
3. The resident said that she did not currently have any money and that because of her financial circumstances the landlord should reduce her rent and write off the outstanding arrears.
4. The landlord explained it was not its policy to write off arrears in the circumstances the resident described.
5. The landlord said it would contact Universal Credit to confirm whether the resident was receiving any Universal Credit payments. The resident said it would not give permission for the landlord to do that.
6. The landlord asked how the resident was supporting herself, the resident said that family and friends had been supporting her.
7. The landlord suggested that the resident could apply for a Discretionary Housing Payment (DHP) from the local council. It said it would get the paperwork which included a rent statement and service charge breakdown sent out to the resident (which it did on 16 February 2021).
8. The landlord said that arranging a payment plan would not be possible until some of the outstanding arrears had been cleared.

14. The resident contacted this Service in February 2021, to make a complaint about the way the landlord had handled the arrears. She said that the landlord had sent her a NOSP without giving her any prior notice that the rent had not been paid and that it had refused to continue to speak with her on the phone and had restricted communication to email only.
15. On 17 February 2021, the landlord issued its stage one complaint response and concluded the following:

1. The last payment by the resident towards her rent was on 11 September 2020. Therefore, as of 16 February 2021, the rent account was £5,298 in arrears.
2. It has sent the resident multiple notifications via email and text. This was to inform the resident that she was in arrears and ask her to make contact with the landlord to resolve the issue. The landlord said it could provide the resident with records of the communication attempts it had made if she wanted to request this.
3. As the account was more than eight weeks in arrears a Notice of Seeking Possession (NOSP) was sent. This was an automatically generated letter that was sent in line with the landlord’s arrears handling procedure.
4. It was not the landlord’s policy to give prior notification to residents beforehand that it would be sending a NOSP.
5. The landlord contacted the resident on 16 February 2021, informing her that she may be able to apply to the local council for a Discretionary Housing Payment. It agreed to send the resident the necessary information to apply and also to contact the resident again to discuss her financial situation.

16. The resident had a subsequent further discussion with the landlord on 16 February 2021, where she was told that a payment plan could not be put in place unless some of the arrears were cleared.
17. On 24 February 2021, the resident emailed the landlord requesting a phone call from the housing officer she had spoken to originally. The resident said that she needed to speak with her to try and work out a repayment plan.
18. On 24 February 2021, the landlord replied saying that it had sent the resident an email the day before stating that email was the best form of contact. It said that this was in order to create a log of the conversations regarding her arrears. The landlord asked the resident to give more information about the kind of repayment plan she was thinking of.
19. On 08 March 2021, this Service emailed the landlord to inform it that the resident wanted to escalate the complaint to stage two of the landlord’s complaint procedure.
20. On 10 March 2021, the landlord issued legal proceedings against the resident as it said she had not cleared the total amount of the arrears necessary to halt the legal action.
21. On 11 March 2021, the landlord responded to a letter which had been sent by the resident’s local MP, raising concerns about her situation. In its response the landlord restated its position concerning the rent arrears on the resident’s account.
22. On 12 March 2021, the landlord sent the resident an email to explain why it had sent her a Pre-Action Protocol letter. It said that the resident had not sent the bank statements and the proof that she had applied for the DHP and the local Resident Support Fund. The email mentioned that the Universal Credit income the resident was due to receive would not be enough to clear the arrears and that the landlord had referred her to a company to help with difficulties she may be having paying her utility bills.
23. On 12 March 2021, the resident responded by email and complained that the landlord was still unwilling to speak with her by phone. The resident said that she had sent the landlord the bank statement it required, and she was in the process of filling out the DHP claim form. She also said she had applied for the local Resident Support Fund, however the operators of the Fund had given her different information than had been provided by the landlord. The resident said that she had paid the £2,500 which the landlord said was needed to withdraw the NOSP and would like to set up a payment plan going forwards.
24. In early March 2021, the residents MP wrote to the landlord to raise the resident’s concerns.
25. On 15 March 2021, the landlord responded saying that its management had agreed that communication regarding the arrears must be done by email.              It said that the bank statement the resident sent was for a savings account not for her current account and so did not show the residents transactions, as the landlord had requested. It also explained that as well as the arrears the resident still had to pay the current rent. It explained that the amount the resident had paid was used to cover the last four weeks rent and the remainder used to offset the arrears. So, the resident still had £532.76 of the arrears to pay before it would be able to discuss a payment plan with her.
26.  The resident asked for her complaint to escalated to stage two and for the landlord to provide evidence for what it had claimed in its stage one response. On 6 April 2021, the landlord issued its final response to the complaint, in which it said that:

1. It made “numerous” attempts to alert the resident to the rent arrears.
2. The resident did not start to address the arrears until the Notice of Seeking Possession (NOSP) had been issued.
3. The payments the resident had made had been split between paying the ongoing rent and paying the arrears. This meant the resident still needed to pay £532.76 towards the arrears.
4. The resident’s rent payment had decreased and would now be £127.29 per week. 
5. It had responded to all requests for contact from the resident and that she was told that all further contact would be by email for “avoidance of doubts.”

27. In addition, the final response listed the items the resident would need to provide in order for legal action to be suspended, these were:

1. Evidence of an application of back payment of Universal Credit (UC).
2. Up to date bank statements starting from September 2020.
3. A completed application for DHP along with a reference number.
4. A completed application for the local Resident Support Fund along with a reference number.

Assessment and findings

28. The resident reported that she did not receive any notifications about the rent arrears and so was not aware of the situation until the NOSP arrived in February 2021. The landlord has provided information regarding the payment history on this account. This shows that the rent account had been in arrears continually since at least 11 March 2020, at which point the arrears were £965.62. Since that time the resident had been making regular payments going towards both the arrears and the ongoing rent that was due. Given her tenancy agreement obligations to pay rent and the fact that she had been making payments for many years, it is reasonable to expect that the resident would have been aware that her rent account would continue to be in arrears when she stopped making payments in September 2020.
29. The resident said she did not receive any notifications regarding the rent not being paid between September 2020 and February 2021. The landlord advised that it would have sent out notifications to the resident by text and email and said in the complaint response that it could supply the resident copies of the rent arrears notifications if requested. This Service has requested copies of the evidence of the notifications the landlord referred to but has not received a reply from the landlord. The landlord’s failure to offer these records to either the resident or this Service means it has not demonstrated that it made reasonable attempts to advise the resident that there were rent arears accumulating on the account and the steps that were required to ensure the rent was paid and legal action avoided. The landlord’s procedures expect contact to be made with the resident before serving a NOSP. Nevertheless, there were considerable arrears on the account on the date of the NOSP and the landlord is entitled to pursue recovery action for unpaid rent.
30. When the resident contacted the landlord in February 2021, it informed her of how much she needed to pay to prevent further recovery action. The landlord              sign-posted her to various bodies over the following two months that could provide financial assistance to help pay her rent and utility bills. It also provided her with a rent statement and a breakdown of her service charge costs. By taking these measures, the landlord has demonstrated that it made appropriate efforts to direct the resident to agencies that may have been able to assist with her financial situation.
31. The landlord refused to agree a repayment plan with the resident, it said that it would only do so if she repaid half of the arrears owed. There is nothing in the landlord’s policy which says that it will refuse to discuss setting up a repayment plan until the resident pays half the arrears. However, the resident had been in arrears continually since at least March 2020 and ceased making any rent payment after September 2020. It is not unreasonable that the landlord wanted the resident to have reduced the arrears before agreeing a repayment plan with her.
32. The resident was initially dealing with the landlord by phone and email. However, in February 2021, the landlord decided to restrict contact with the resident to email only. It said this was due to miscommunication which occurred between the landlord and the resident whilst trying to discuss the rent arrears. The landlord’s notes also suggest the resident was calling its contact centre on a regular basis to speak to the housing officer. To address this the landlord decided, because its calls are not recorded, that it would be best to communicate with the resident by email. This was so there was a record of communications between the two parties.
33. The resident was unhappy with this arrangement and in the following months she requested on multiple occasions, to speak with the landlord over the phone. In an email on 27 February 2021, the resident explained that she was anxious and wanted to speak to a member of staff to agree a payment plan. Whilst it is reasonable to ensure there is a record of contact with the resident particularly if there is the possibility of legal proceedings taking place, there is also an expectation that the landlord will consider making adjustments to the arrangements, particularly given its policy of being sensitive to the vulnerabilities and mental wellbeing of its residents.
34. Following the service of the NOSP, the landlord spoke to the resident by phone on 16 February 2021 and thereafter communicated with the resident by email. The emails from the landlord explained the process for rent arrears recovery action, what the resident was expected to do to ensure the arrears were reduced, ongoing payments were made and gave information about obtaining support and debt advice. Whilst the information provided by the landlord was comprehensive and no shortcomings have been identified in this communication with the resident, a recommendation has been made below that the landlord reviews its contact arrangements with the resident to ensure they are reasonable taking into account the concerns the resident has raised about her mental health.

Determination

35. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in regard to its handling of rent arrears recovery action.

Reasons

36. The landlord has failed to demonstrate that it attempted communication with the resident when she ceased to pay the rent after September 2020, prior to sending the NOSP.
37. The landlord is entitled to pursue recovery action when there are significant outstanding arears, following the service of the NOSP, it gave appropriate information and advice about how to ensure the rent was paid and the arrears reduced.

Orders

38. The landlord to apologise to the resident for the failing identified in this report.
39. The landlord to pay the resident £100 compensation for failing to demonstrate it contacted her prior to serving the NOSP.

The landlord should confirm compliance with these orders to this Service within four weeks of the date of this report.

Recommendations

40. The landlord to review its processes around restricting contact with its residents, ensuring it has an audit trail on file of its decisions and the process for reviewing its arrangements.
41. The landlord to review its decision not to communicate with the resident by phone, taking into account what the resident has said about how it is affecting her mental wellbeing. It should write to the resident informing her of the outcome of its review.

The landlord should confirm its intentions in regard to this recommendation to this Service within four weeks of the date of this report.